We have investigated the hydriding properties and microstructures of the new composite material Ti0.6Zr0.4Mn0.8CrCu0.2/Mg which contains elemental Mg as a binder. The hydriding properties of the host compound are improved owing to the Mg reduction effect in the process of heat treatment. In addition, we observed that in the process of heat treatment the Cu in the host compound Ti0.6Zr0.4Mn0.8CrCu0.2 diffuses into the Mg region and Mg2Cu is formed. After hydriding and dehydriding cycles, hydrogen in the host compound diffuses into the Mg region through the Mg2Cu phase. Consequently, MgH2 is formed even at temperatures below 373 K under hydrogen pressures of less than 1 MPa.